Nova Case Essay

In this paper, we are examining the 1998 DuPont spin off of Conoco by analyzing the transaction itself. Then, I look at one of the possible alternatives to the chosen transaction and compare that alternative with the actual long term impacts of the sale. I will then decide and recommend which option would have been the best utilized by DuPont over the long-term in order to generate the most revenue from its ownership of Conoco.

ASC 320-10-35-33F: “Changes in the quality of the credit enhancement should be considered when estimating whether a credit loss exists and the period over which the debt security is expected to recover.”

This case is talking about an executive retreat. It was introduced by John Matthews who was a executive had been selected to attend the two-and-a-half-week retreat. The retreat was more like a competition about academic and athletic. The team members should not only get know each other and cooperate with teammates but also need to compete with others. The whole participants were broken into five groups and their aim was to win the competition. There are several sessions about academic and athletic that the participants should complete. After the introduction part the case showed the experience of John. Before the group meeting John was wondering and worried about this retreat. When he was taking the first group meeting, he tried to learn

5. If O’Reilly does not initiate change, there are several consequences that could possibly occur. If Terra Nova continues its slow financial decline, the company will find it difficult to recruit top young talent. Young employees are demanding more and more from their companies; money alone is no longer enough to ensure effective recruitment. If Terra Nova cannot attract employees successfully, universities and other recruitment centers and programs will remove Terra Nova from their list of recommended firms. Initiating change is not an immediate process and careful steps need to be taken in order to ensure that change occurs effectively and that change is sustained.

In other words, the price has to be justified and not seem like an arbitrary number. Slaoui and Witty managed to this by emphasizing on Sirtris’ strengths in terms of their research, but particularly in terms of the actual field Sirtris is engaged in, that could potentially be a transformative science allowing for the development of multiple drugs that have the potential of treating diabetes and other diseases that promise a high turnover when launched. In other words, I would make sure that the members of the board are able to see the potential benefits and above all profits of the respective acquisition.

There is a chance that Floral Fragrances would be a target of a hostile takeover. FFI is a relatively small company with a potential to grow bigger by penetrating the market of other countries. However, with their need for financial support, the corporation is a potential target of a hostile takeover. The growth of the company might be getting slower since their current ratio is 1.3 while other industries are averaged at 2.5. Their debt to asset ratio is 0.42, which can be calculated by total liabilities divided by the total assets. Due to the current dividend policy, there is a chance that the price per share would decrease overtime or the growth of the price per share would slow down. The company takeover can be avoided by repurchasing stock,

The Stock market reaction to the acquisition of the PacifiCorp seems to portray the deal as win-win situation since it created value for both companies. The Berkshire Hathaway’s share price closed the day at 2.4%, with a $2.55 billion gain in market value, while the Scottish power Plc only managed a $0.81 billion. For the previous owners, Scottish power included, the price offered shows the gain in value over a few years since the merger with PacifiCorp is significant. As per acquisition accounting, the $2.5billion increase in market value is the company’s increase market value. The share price increase in share price also indicates that it was a good long-term deal.

After carefully analyzing the data given, we believe that FVC’s value is roughly $270 millions, including synergies. The company’s stand-alone equity value is more than $158 millions. The synergies that derive from this acquisition are extremely beneficial to both FVC and RSE. RSE’s purchasing power would help to reduce material costs for FVC. The acquisition would also bring in estimated tax savings of $2 millions the first year and $4 millions thereafter. RSE’s new project, CORE, is expected to improve and save in-process costs for FVC, making it more efficient and helping to increase the company’s bottom line. Moreover, FVC could utilize RSE’s marketing power and strategies to advertise their new advanced hydraulic-controls system or “widening gyre”. Flinder believed that the

naviHealth Holdings, for $238 million, net of cash acquired of $53 million. The acquisition of naviHealth, a

Given the relative stable net income and strong value in the Dupont Company, any divestiture may be attractive to potential private-sector investors. However, because these assets contribute substantial, ongoing and growing revenues to the province, any potential divestiture would need to carefully assess the value of any upfront, one-time gains against loss of future revenues.

When planning a divestiture, the parent [and its advisors] must tailor the structure of the transaction to meet the strategic objectives of parent. It is imperative that such objectives be clearly articulated so that the parent and its advisors are able to develop a structure that (a) achieves the business and financial goals, including tax treatment, parent intends, and (b) may be executed (i) in the time frame parent anticipates and (ii) most efficiently taking into consideration (A) corporate and securities laws at the state level, (B) securities laws, anti-trust laws, and laws governing foreign ownership of US assets, at the federal level, and (C) overall transaction cost.

Although the record confirms that the company is performing well from a “marketing perspective,” it is clear that the same is not true from a financial perspective. It is also noted that the demand in the market for SUPs is growing at 25% so a transient advantage strategy would be ideal to maximize the profits of a new opportunity (see Figure 2 below for example).

Divestitures of corporate asset have a variety of forms, including sell-offs, leveraged buyouts, and spin-offs. A spin-off is a pro-rata distribution of the shares of a firm’s the newly formed subsidiary to the shareholders of the original company (parent company). Unlike other types of divestitures, a spin-off doesn’t involve exchange of cash. In other words, there is no cash transaction taking place in spin off. Therefore, a spin-off is not generated by the company 's motivation of generating cash flow benefits. Nevertheless, spin-off is not a costless transaction. Since a spin-off is associated with the cost of registration, new share distribution and dividend payment. Both the parent company and spun off company traded separately as the consequence of spin-off. Also, the subsidiary operates independently from the parent company. After the spin-off, the shareholders of the parent company hold shares in both the parent company and the subsidiary. Therefore, the performance of parent company and spun off company can be analysing as separate entities.

2009 was a crucial year. It was in this year that the company has been successfully uplisted into NASDAQ. This event appeared to be the result of recovery of its share price considering the fact that its 2008 net income has increased by 50 percent compared to that of 2007 ended with 15 million (), however, that was probably not the only reason. During the second quarter of 2009, this company performed a so-called “Reverse Stock Split” which effectively increased their share price satisfying the minimum share price requirement for shares to be listed in NASDAQ (). This 1-for-2 reverse stock split has reduced the number of shares by about 50% from 29 million to 14.6 million, yet there was no change to the company’s market capitalization pre-split and post-split (). It can be said that the reverse stock split has generated an illusory image that this company was growing so that more investors would be attracted by this company (). The negative effect of this false image can be clearly seen from the above chart. The traded volume in 2009 has become significantly larger than those of previous years’. This share has seized the chance and almost achieved three times of the original price by the year end. It is noticeable that it was during this period, this company has raised its capital of $50 million.

Many successful businesses tend to expand beyond their local frontier by growing some strategic areas of their operation while they divest from less profitable areas of their operation. There are two major ways of growing a business as discussed in the case study of Davis Service Group (DSG) and they are categorized as organic and inorganic growth.